Retail investor: I sell covered calls on all my stocks. Easy income every month.


Me: Why'd you buy those stocks in the first place?
Retail investor: Because I think they're going up. Obviously.
Me: So you bought them to go UP... then sold away the up with the CC?
Retail investor: I mean... I keep the premium though.
Me: You keep $200 & when the stock rips 40%, your shares get called away at the bottom of the move. You paid 40% of upside for $200.
Retail investor: ...that exact thing happened to me on $NVDA.
Me: It happens to almost everyone who sells calls on companies they believe in. You're betting FOR the company & AGAINST it in the same account.
If you're bullish, act bullish. Sell portfolio secured puts instead... you get the income WITHOUT capping the exact upside you bought the company for.
NVDA-2.36%
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